Cigarette Price Hike India Could Push Costs to Rs 72

People in India will likely see one of the largest hikes in tobacco product pricing in history. The Parliament recently passed the Central Excise Amendment Bill 2025. It would significantly alter the tax structure for cigarettes and other tobacco products. This demonstrates a strong commitment from the Indian government towards reducing tobacco consumption as well as increasing overall revenues.

What Will the New Excise Tax Mean for Consumers?

Consumers will find out quickly what impact the new changes to the excise tax structure will have on their grocery bills. In fact, they can expect to be paying more money for each box of cigarettes purchased. Similar changes to other taxed tobacco products, such as Cigars, Cigarillos, Hookah Tobacco, Chewing Tobacco, Zarda and Flavored Tobacco, along with the proposed Cess will.

The Indian Parliament has cleared the Central Excise Amendment Bill 2025. It was brought forward by the Minister of State for Finance, Pankaj Chaudhary, and put to vote in the Rajya Sabha. It will have an immediate impact on consumers when they shop for these products. This is once the bill is approved by the Lok Sabha and passed into law.

Previously, there were very little taxes placed on cigarettes. The previous Central Excise Act, 1944, had Cigarette Duties set at anywhere from Rs 200 to Rs 735 for each 1,000 Cigarettes based on the size and type of Cigarette. This is going to change with the passage of the Central Excise Amendment Bill 2025. With the proposed Amendment, the Duties on cigarettes will be increased to anywhere from Rs 2700 to Rs 11,000 for each 1,000 cigarettes.

Government Officials foresee that the price of Cigarettes currently at Rs 18 will likely be increased to Rs 72 shortly. This increase will affect both casual and regular smokers.

Tax hikes on Other Tobacco Products

Cigarettes are not the only products being taxed at an increased rate. Legislation proposes substantial increases in taxation throughout all of the Tobacco Industry:

• Cigars, and Chewing Tobacco: from 25% to 100% – a 400% increase.
• Hookah Tobacco, also known as Shisha: from 25% to 40% – a 160% increase.
• Tobacco Blends (for Cigarettes and Pipes): from 60% to as much as a 325% increase.

These tax increases could affect how people use tobacco. Particularly from areas where tobacco is cheaper or easier to obtain.

Government Objectives Moving Forward

According to government officials, the purpose of this new taxation structure is to lower the number of people using tobacco products. Especially those under the age of 25 and those who are just starting out. In addition, the proposal aligns with the government’s Public Health Strategies. India continues to deal with growing rates of Tobacco-Related Diseases.

In addition, the government anticipates collecting Increased Excise Tax, which will help maintain Fiscal Stability Due to changing Economic Circumstances. Stories in the recent news updates have included information on these tax and Public Health related changes in Government Policy.

Public Reaction: Support, Satire, and Hope

Following the announcement, there were significant reactions posted on social media. While many people across India were making jokes, many have had some funny responses to the announcement from those living in cities with severe air pollution. A Redditor who lives in Delhi commented, “What do I care? I’ll just breathe Delhi’s air. It’s FREE FREE FREE.” The individual was alluding to how dangerous it is to breathe air that has been polluted.

Some Redditors were very excited about the announcement and hoped that raising prices would create a decrease in smoking by college age students and younger. One Redditor, who identifies as a smoker, said that he was hopeful that the price increases would help him stop smoking and would help reduce the number of young people who smoke.

If implemented, the new excise tax would dramatically change the tobacco landscape in India. Many public health advocates feel that if prices are raised, it will create an opportunity for public health support to assist smokers in quitting by creating opportunities for them to quit. As the bill continues to progress through the legislative process, all eyes will be on how fast the new tax will go into effect and what impact it will have on the percentage of smokers in the country.